NEW YORK, Oct. 20, 2015 /PRNewswire/ -- The number of actively managed exchange-traded funds (ETFs) is likely to increase significantly once the U.S. Securities & Exchange Commission rules on proposals designed to discourage high-frequency traders from stepping ahead of active managers, according to BNY Mellon's ETF Services group.
While traditional ETFs are highly transparent, this characteristic has been a detriment to some active managers who do not want every move studied by high-frequency traders seeking to front-run their transactions. The various proposals being considered by regulators would limit the transparency required for managers of active ETFs. However, many in the industry believe that investors are willing to give up a measure of transparency to access active management in a cost-effective vehicle.
Commenting on the eve of BNY Mellon's fourth annual ETF Symposium, Steve Cook, business executive, structured product services at BNY Mellon, said, "Uncertainty around which proposal will be adopted has slowed the launch of actively managed ETFs this year. However, once we have regulatory clarity, we expect a rebound in launches of actively managed ETFs. It will result in more options for investors, which is what everyone wants."
The symposium runs October 20 to October 22 at the St. Regis Monarch Beach Resort in Dana Point, California. The symposium will focus on important issues in the ETF marketplace including the emergence of non-transparent active ETFs, the validity of fixed income ETFs, market liquidity and the impact of new regulations.
Among the industry thought leaders scheduled to present at the event are Steve Forbes, chairman and editor in chief of Forbes Media; Deborah Fuhr, co-founder of ETFGI; and Kathleen Moriarity, partner of Kaye Scholer. This is the fourth year of the symposium, which highlights best practices and strategies for registered investment advisors, sponsors, investors and other participants in the ETF Industry. For more information on the event, visit www.bnymellon.com/etf.
BNY Mellon has been supporting actively managed issues since they were launched in 2008. "As active ETFs evolve and provide investors with new choices, BNY Mellon has been enhancing its technology to support the nuances of both non-transparent and transparent offerings in the active space," said Cook.
Overall, Cook sees continuing growth in the ETF industry as investors continue to appreciate their benefits relating to liquidity, tax efficiency and costs. The number of assets in ETFs passed $2.7 trillion in August 2015, up from $2 trillion in 2013, and $1 trillion in 2009*.
BNY Mellon is one of the world's largest ETF servicers, and this is the fourth year that it has hosted its ETF Symposium, which highlights best practices and strategies for registered investment advisors, sponsors, investors and other participants in the ETF Industry.
BNY Mellon has a long history supporting the unique servicing needs of ETFs and has played a leading role in the development of procedures and systems integral to some of the first and most innovative products of the ETF industry. As of September 30, 2015, BNY Mellon supported 35 ETF issuers, with 603 separate ETFs in the U.S., Europe and Asia with approximately $260 billion in net assets.
BNY Mellon's Asset Servicing business supports institutional investors in today's fast-evolving markets, safeguarding assets and enhancing the management and administration of client investments through services that process, monitor and measure data from around the world. We leverage our global footprint and local expertise to deliver insight and solutions across every stage of the investment lifecycle.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2015, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
*Source: ETFGI, August 2015
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SOURCE BNY Mellon